Results mixed on gambling initiatives

WilliamSpain

CHICAGO (CBS.MW) - Forget Ohio: For the gambling business, it still comes down to Florida.

The fate of a ballot measure that permits two Sunshine State counties to decide on an initiative for slot machines at racetracks and wagering on jai-alai competition was still too close to call Wednesday, although it trailed by a tiny amount.

Amendment 4 was very close, with 50.05 percent against and 49.95 in favor, a spread of just few thousand votes. The measure would allow Broward and Miami-Dade counties to decide later whether such wagering should be permitted.

At stake is the possible placement of 15,000 to 25,000 slot machines which, if passed, could bump the bottom lines of suppliers including International Game Technology
IGT, +7.10%,
WMS
WMS, +2.19%
and Alliance
AGI, -3.15%.
Other beneficiaries could include racetrack owners Churchill Downs, Magna Entertainment and Isle of Capri.

Shares of IGT were off about 1 percent at $34.60, while WMS added 1.3 percent to $30.30. Alliance gained nearly 4 percent to $9.76.

Gambling-related referendums were before voters in five other states, handing the business a mixed bag. Propositions in California that would have greatly expanded American Indian gaming and possibly opened the doors to slot parlors went down by better than 3-to-1 margins.

Nebraska initiatives that would have legalized two casinos also lost, potentially helping two casino companies in nearby Iowa. Ameristar
ASCA
and Harrah's
HET, +0.00%
would have faced increased competition.

A proposition in Washington that would have allowed about 18,000 new electronic scratch ticket machines was defeated as well.

The industry got better news out of Oklahoma, where voters approved a model for Indian gambling that could include some slots at racetracks. They also approved the creation of a new statewide lottery, its first.

Results out of Michigan were win-lose for the industry. A proposal that would amend the state constitution to require any further gambling expansion get statewide as well as local voter approval won handily.

That dashed the hopes of some racetrack owners, who were counting on legislative pull to approve a bill that would have allowed them to install slot machines. At the same time, it was a major positive for three existing casino operators in Detroit, including MGM Mirage and Mandalay Resort Group.

MGM Mirage
MGG, +0.94%
and Mandalay
MBG, -0.23%
are expected to close on their merger early next year; shares of the former were up 1.4 percent to $55.55 while the latter edged up 11 cents to $69.21,

In a note to investors Wednesday, Deutsche Bank analyst Marc Falcone wrote that there were no big surprises in the outcome.

"All-in, we feel that yesterday's results were a net neutral to modest positive from gaming," he said. He added passage of the Oklahoma referendum was a plus, and even the failure of the California initiatives still leaves the door open for Indian tribes to renegotiate their contracts.

"We remain confident in meaningful gaming expansion in both states with a lot of uncertainty now removed," Falcone said.

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